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Appleton, Minn. prison gets $7.5 million cut in value

BENSON -- The market value of the privately owned Prairie Correctional Facility in Appleton -- its prison beds empty for nearly 2½ years -- has been reduced by $7.5 million to a new value of $14 million.

The reduction was approved Tuesday night by the Swift County Board of Equalization.

But even that large reduction may not be enough to prevent the pri-son's owner, Corrections Co-rporation of America, from seeking even greater tax relief by means of an appeal to the state.

"They left, we hope, content enough not to appeal to the state board of equalization," said Swift County Auditor Byron Giese.

Assistant County Assessor Wayne Knutson had said the prison property should be valued at $22.5 million.

The Corrections Corporation of America said it should be valued at $10 million.

The Swift County Board of Equalization members agreed that the value of the empty prison should be reduced and members compromised with a market value of $14 million.

It's not known if Corrections Corporation of America will accept that $14 million valuation or if it will stage another appeal.

The $14 million valuation is a far cry from the $42.9 million the county assessor valued the property at in 2010. That rate was also later reduced during a court appeal and binding negotiation -- a process in which the county and Corrections Corporation of America has engaged ever since the 1,600-bed prison opened in 2001.

"They have appealed every single time," said Giese.

The legal process usually involves the county assessor setting the market value and the Corrections Corporation of America filing appeals in court that eventually end at the state Board of Equalization, which Giese said then allows the county and the corporation to negotiate three-year agreements that are binding.

But that process involves attorneys for both sides.

Giese said the county has spent slightly more than $2 million in legal fees over the last 21 years negotiating market valuations for the prison.

This time the County Board took a different route and agreed to reduce the market value at the County Board of Equalization meeting in an effort to avoid the lengthy and costly legal process.

"Is $14 million the right number? We hope so. We also hope the prison opens as soon as possible," said Giese, adding that he is not aware of any plans to reopen the prison.

Having the prison closed since February of 2010 has meant lost jobs and tax base for the city, school and county.

Reducing the market value of the prison means spreading the tax burden to other commercial and residential property.

"It's going to affect the individual taxpayers in the city of Appleton pretty hard," said Giese, who estimated there would be a 20 percent increase in taxes because of the $7.5 million reduction in market value for the prison.

Appleton City Clerk/Treasurer Roman Fidler said calculations have not yet been run to determine the exact impact to city residents.

He said the city and Corrections Corporation of America are "doing their best" to get the prison reopened. He said a tough economy has made it difficult for states to sign contracts to house prisoners in Appleton.